§ 


F 
845 


BANCROFT 
LIBRARY 

•o- 

THE  LIBRARY 

OF 

THE  UNIVERSITY 
OF  CALIFORNIA 


REPORT 


Committee  on  Jtkrai  Belntkms 


JOIXT     MKMOUIAL     AM)     KMSOUTIOXS    ASKINU 
(J-OVKHXMKXT  AID   IX    TIIM  ( 1OXSTIU'(TI()X 
OF    TMK    Sl'TRO 


0  ARSON    CITY: 
JOSEPH     E .    ECKLEY,    STATE     PRINTER. 

186T. 


REPORT 


,      L  01  e,  i* 


,      o  *A~~  eJE*. 


VJ 


C0mmitte  011  Jftkral 


IS    RELATION    TO 


JOINT    MEMORIAL  AND    RESOLUTIONS    ASKING 

GOVERNMENT  AID  IN  THE  CONSTRUCTION 

OF   THE   SUTRO    TUNNEL. 


CARSON    CITY: 
JOSEPH    E.    ECKLEY,    STATE    PRINTER. 

1867. 


INDEX. 


PAOB. 

IEMORIAL  AND   RESOLUTIONS v 

II.     REPORT  OF  COMMITTEE  ON  FEDERAL  RELATIONS 3 

Extent  of  the  Mining  Regions 3 

Gold  Mining  in  California 3 

Placer  Mining  not  permanent 3 

The  Comstock  Lode 4 

Continuity  in  Depth 4 

The  Sutro  Tunnel 4 

Importance  of  the  work 4 

Other  Lodes 5 

Future  Yield 5 

Difficulties  in  Mining. 5 

Increase  of  Heat 5 

Evil  Effect  of  Foul  Air 6 

Necessity  of  a  Tunnel 6 

Mining  Companies 6 

European  Mines 7 

Depreciation  in  value  of  Money 7 

Difference  between  the  Precious  Metals  and  other  commodities.  7 

Increase  in  quantity  of  the  Precious  Metals 7 

^preciation  in  value  of  property 8 

Increase  of  taxable  property  in  the  world 8 

It  does  not  affect  individuals 8 

It  materially  affects  a  debt 9 

Beneficial  influence  in  Great  Britain 9 

Prosperity  of  the  United  States 10 

Financial  Crisis 10 

The  National  Debt 10 

Increase  of  taxable  property  in  the  United  States 10 

Increase  of  revenue 11 

Payment  of  the  National  Debt 11 

Sir  Robert  Peel 11 

M.  Chevalier 12 

Importance  of  the  question 12 

National  Aid 12 

III.     LEGISLATIVE  PROCEEDINGS 13 


MEMORIAL  AND  RESOLUTIONS. 


SENATE. 

JOINT  MEMORIAL  AND  RESOLUTIONS  ASKING  GOVERN- 
MENT AID  IN  THE  CONSTRUCTION  OF  THE  SUTRO 
TUNNEL. 


WHEREAS,  The  State  of  Nevada  contains  within  its  borders  a  silver  vein 
called  the  Comstock  Lode ;  and 

WHEREAS,  A  deep  drainage  and  exploring  tunnel,  leading  into  said  lode,  is 
necessary  to  its  permanent  yield  of  the  precious  metals ;  and 

WHEREAS,  The  character  of  said  lode  is  now  demonstrated  to  be  such  as  to 
give  ample  security  to  the  capital  necessary  to  be  advanced  for  its  construction  ; 
and 

WHEREAS,  The  following  facts  in  connection  with  the  foregoing  are  of 
weighty  consideration : 

That  the  mines  of  said  lode  have  been  worked  for  seven  years  last  past,  and 
during  this  time  have  produced  sixty-four  millions  (64,000,000)  of  dollars. 

That  the  present  annual  yield  is  sixteen  millions  (16,000,000)  of  dollars,  an 
amount  equal  to  the  total  annual  product  of  the  Republic  of  Mexico. 

That  the  expense  of  working  these  mines  so  rapidly  increases  with  the  increased 
depth,  that  the  sixteen  millions  (16,000,000)  of  dollars  were  last  year  realized 
at  a  cost  of  fifteen  million  five  hundred  thousand  (15,500,000)  dollars  ;  and,  at 
the  present  ratio  of  cost  to  production,  their  resources  would,  in  a  few  years,  be 
wholly  absorbed,  and  the  mines  practically  abandoned. 

That  the  causes  of  increased  cost  are,  amongst  others,  the  accumulation  of 
water  in  the  mines,  insufficient  ventilation,  and  the  increase  of  heat  with  depth ; 
and  that  now,  having  reached  a  depth  of  eight  hundred  (800)  feet,  these  com- 
bined causes  will  prevent  their  being  worked  profitably,  on  the  present  plan, 
below  twelve  hundred  (1200)  feet. 

That  the  Comstock  Lode  is  conveniently  placed  for  deep  drainage,  being 
situated  on  the  side  of  a  mountain,  which  declines  into  a  valley,  from  which  a 
horizontal  adit  or  tunnel  four  miles  long  can  be  constructed,  which  will  cut  the 
mines  at  a  depth  of  two  thousand  (2000)  feet. 

That  this  tunnel  once  constructed,  these  mines  can  be  profitably  worked  to  a 
depth  of  three  thousand  (3000)  feet,  and  by  means  of  it,  at  least  a  thousand 
millions  of  treasure  will  be  secured. 


VI 

That  the  State  of  Nevada  cannot  render  material  aid  to  this  indispensable 
work,  by  reason  of  Constitutional  inhibitions. 

That  the  mining  companies,  while  producing  large  amounts  of  bullion,  and 
distributing  it  into  the  channels  of  trade  and  commerce,  under  existing  cir- 
cumstances derive  but  an  inconsiderable  profit,  and  are  not  equal,  without  Govern- 
ment aid,  to  the  successful  prosecution  of  such  an  undertaking. 

That  the  taxable  property  of  the  United  States  has  been  more  than  doubled 
within  the  last  eighteen  years,  and  this  increase  has  mainly  resulted  from  the 
vast  addition  to  the  precious  metals  within  this  time;  and  the  further  addition  of 
one  thousand  millions  would  be  an  increase  to  that  extent  of  the  public  re- 
sources, and  virtually  a  reduction,  to  a  considerable  extent,  of  the  public  debt. 

That  the  United  States  contain,  by  estimation,  one  million  square  miles  of 
mineral  land,  the  chief  value  of  which  is  to  be  found  at  great  depths  from  the 
surface ;  and  what  is  now  wanting  to  enlist  private  enterprise  in  the  aid  of  deep 
mining,  and  thus  develop  incalculable  wealth,  is  a  practical  proof,  upon  such  a 
scale  as  the  proposed  tunnel  would  furnish,  that  our  mines  are  continuous  to  the 
lowest  levels  at  which  drainage  can  be  secured. 

That  in  all  European  mining  countries,  the  aid  of  Government  is  given,  on 
broad  financial  considerations,  to  enterprises  of  this  and  like  character. 

That  the  magnitude  of  the  proposed  work  and  the  results  to  flow  from  its 
completion,  as  favorably  affecting  great  financial  questions,  justly  assign  to  it  a 
National  consideration.  Therefore, 

Resolved,  By  the  Senate  and  Assembly  of  the  State  of  Nevada,  conjointly, 
that  our  Senators  be  instructed,  and  our  Representative  requested,  to  use  their 
best  endeavors  to  obtain  from  Congress  such  material  aid  as  will  secure  the 
speedy  construction  of  the  deep  drainage  and  mining  tunnel  known  as  the  Sutro 
Tunnel. 

Resolved,  That  the  Governor  be  requested  to  transmit  a  copy  of  the  foregoing 
preamble  and  resolutions,  together  with  the  Reports  of  Committees,  to  each  of 
our  Senators  and  to  our  Representative  in  Congress. 


REPORT 


The  Committee  on  Federal  Relations,  to  whom  was  referred 
"  Joint  Memorial  and  Resolutions,  asking  Government  aid  in 
the  construction  of  the  Sutro  Tunnel,7'  beg  to  report  the  same 
back,  and  recommend  its  passage. 

Along  with  said  Memorial,  and  as  a  part  thereof,  they  likewise  submit  the 
following  Report : 

KXTENT    OF    THE    MINING   REGIONS. 

The  vast  regions  embracing  portions  of  California,  Nevada,  Dakota,  Ne- 
braska, Colorado,  New  Mexico,  Arizona,  Utah,  Washington,  Oregon,  Idaho  and 
Montana,  covering  an  area  of  one  million  of  square  miles,  containing  untold 
wealth  in  gold  and  silver  mines,  to-day  command  the  attention  of  the  American 
statesman. 

GOLD    MINING    IN    CALIFORNIA. 

Mining  for  gold  and  silver  is  comparatively  of  recent  date  within  this  country. 
The  discovery  of  gold  in  California  gave  the  first  active  impulse  to  the  search 
for  precious  metals.  The  immense  "placers  "  of  that  region  invited  a  numerous 
and  adventurous  population  from  all  parts  of  the  globe,  and  the  facility  with 
which  the  surface  earth  yielded  its  golden  treasures,  the  implements  required  con- 
sisting only  of  a  pick,  a  shovel  and  a  rocker,  within  the  reach  of  every  one,  soon 
swelled  the  amount  of  bullion  produced  to  astounding  figures,  and  worked  a 
revolution  in  the  financial  condition  of  the  entire  world. 


PLACER   MINING   NOT    PERMANENT. 

But  the  gold  distributed  in  the  alluvial  deposits,  attacked  as  it  was  by  many 
thousands  of  miners,  soon  disappeared  in  the  most  favored  localities.  The 
enterprising  mining  population  looked  for  more  permanent  deposits,  and  dis- 
covered them  at  some  depth  upon  the  bedrock,  where  ancient  rivers  had  de- 
posited the  precious  particles. 

These  also  gave  no  promise  of  permanency;  and  the  intelligent  miner  now 


turned  his  attention  to  the  fountain  head,  the  true  matrix  of  the  precious  metals, 
from  whence  the  immense  distribution  had  taken  place,  which  covers  the  hill-sides 
and  valleys — the  quartz  mines  of  the  country. 


THE    COMSTOCK    LODE. 

The  discovery  of  the  Comstock  Lode,  in  the  then  Territory  of  Utah,  on 
which  are  located  the  most  productive  mines  at  present  wrought  in  the  world, 
gave  a  new  impulse  to  quartz  mining. 

This  remarkable  mineral  deposit  occurs  in  what  is  termed  a  true  fissure  vein, 
or  a  vein  formed  at  a  very  remote  period  by  some  great  volcanic  convulsion, 
causing  the  crust  of  the  earth  to  be  rent  in  twain,  thus  creating  an  immense  chasm 
or  fissure,  several  hundred  feet  in  width,  and  several  miles  in  length. 


CONTINUITY   IN    DEPTH. 

This  large  fissure,  which  gradually  filled  up  by  ascending  vapors  and  gases, 
carrying  with  them,  in  a  volatile  form,  quartz,  gold  and  silver,  leaves  no  doubt 
to  the  scientific  investigator,  of  its  permanency ;  for  the  very  theory  of  its  form- 
ation, having  been  filled  from  unknown  depth,  compared  with  which  the  deepest 
mining  works  appear  insignificant,  proves  it  conclusively. 

Independently  of  theory,  however,  practical  experience  has  shown  all  over  the 
world,  that  true  fissure  veins  are  continuous  in  depth ;  and  not  a  single  authenti- 
cated instance  is  recorded  where  one  of  them  has  failed.  Notwithstanding, 
mining  is  looked  upon  as  a  hazardous  undertaking ;  and  no  matter  what  theories 
demonstrate,  or  what  experience  in  other  countries  teaches,  capital  is  reluctantly 
invested  in  adventures  of  that  kind. 

As  stated  already,  quartz  lodes  are  the  true  source  of  the  precious  metals : 
to  them  must  we  look  for  the  future  supply,  and  anything  which  tends  to  develop 
that  interest,  should  be  regarded  by  the  legislators  of  the  country  as  an  all-import- 
ant benejit  to  the  nation. 


THE    SUTRO    TUNNEL. 

What  is  required  to  thoroughly  develop  that  interest,  and  to  induce  private 
capital  hereafter  to  embark  largely  in  mining  pursuits,  is  a  practical  and  posi- 
tive demonstration  of  the  continuity  of  the  mineral  lodes  in  depth;  and  no  work 
will  prove  this  proposition  more  thoroughly  and  satisfactorily  than  the  proposed 
Sutro  Tunnel.  This  tunnel,  starting  near  the  borders  of  Carson  River,  a  dis- 
tance of  four  miles,  will  cut  the  Comstock  Lode  at  a  depth  of  2,000  feet :  while 
if  continued  a  short  distance,  it  will  reach  a  point  under  the  summit  of  Mount 
Davidson  at  a  depth  of  3,500  feet.  By  means  of  the  tunnel  the  mines  can  be 
worked  at  least  1,000  feet  below  its  level,  thus  demonstrating  the  continuance  of 
the  Comstock  Lode  to  a  depth  of  3,000  feet,  a  greater  depth  than  has  yet  been 
reached  in  any  mine  in  the  world. 


IMPORTANCE     OF    THE    WORK. 

The  bearing  this  work  will  exercise  upon  the  future  of  the  mining  interest  in 
the  United  States,  cannot  be  too  highly  appreciated.  Capital  will  be  invested 
in  enterprises  of  the  like  character  where  no  confidence  exists  now ;  millions  of 
treasure  will  see  the  light  which  now  lie  buried  deeply  in  the  bowels  of  our 


mountain  ranges.  The  immediate  and  direct  results  from  this  work  will  be  the 
developments  made  on  the  Comstock  Lode.  This  great  lode  was  discovered  in 
the  year  1859,  and  has  yielded  thus  far  $64,000,000  in  silver  and  gold — chiefly 
the  former.  The  regular  annual  yield,  now,  is  $16,000,000. 


OTHER    LODES. 

If  we  compare  this  lode  with  other  great  mineral  lodes,  we  find  that  none  were 
ever  worked  in  the  old  world  of  equal  or  approaching  magnitude.  The  Amer- 
ican continent  has  produced  three  similar  mines — the  great  Potosi  mine  of  Bo- 
livia, which  yielded  $1,200,000,000,  the  Veta  Madre,  of  Guanajuato,  $800,000,000, 
and  the  Veta  Grande,  of  Zacatecas,  $650,000,000— the  two  last  named  being 
in  Mexico.  Competent  geologists  assert  that  the  Comstock  is  a  larger,  more 
regular  and  permanent  vein  than  either  of  the  others  mentioned.  What  can 
we  expect  to  be  its  yield,  with  the  proposed  tunnel  once  finished,  enabling  the 
miner  to  explore  the  same  to  a  depth  of  three  thousand  feet,  with  the  modern 
improved  appliances  for  mining,  and  the  enterprise  and  energy  of  the  Ameri- 
can artisan  to  guide  its  operations  ? 


FUTURE    YIELD. 

If  we  estimate  its  yield  after  the  proposed  tunnel  is  completed,  at  $30,000,000 
per  annum,  we  will  have,  in  thirty  years,  the  enormous  yield  of  $900,000,000 ; 
and  this  may  be  be  considered  a  moderate  estimate.  Without  the  projected 
tunnel,  this  vast  and  important  property,  which  directly  and  indirectly  gives 
employment  to  nearly  or  quite  100,000  people,  will,  after  the  lapse  of  a  few 
years,  have  to  be  abandoned,  for  reasons  which  are  at  once  apparent  and  con- 
clusive. 

DIFFICULTIES    IN   MINING. 

The  yield  of  these  mines  for  the  year  ending  Doromber  31st,  1866,  has 
been  $16,000,000,  which  was  procured  at  a  cost  to  the  mining  companies  of 
$15,500,000,  leaving  the  paltry  net  profit  of  $500,000.  This  extraordinary 
result  is  due  to  various  causes,  prominent  amongst  which  are,  the  difficulty  of 
removing  the  water  from  the  mines,  want  of  ventilation,  the  increase  of  heat 
in  going  downwards,  and  the  expense  of  transportation.  These  mines  are  sit- 
uated on  the  side  of  a  mountain,  and  are  approached  by  perpendicular  shafts, 
of  which  there  are  over  forty.  These  have  reached  a  depth  of  from  500  to 
900  feet,  and  on  each  of  them  a  steam  engine  is  placed,  which  propels  pumps, 
and  at  the  same  time  hoists  the  ore  and  debris.  The  cost  of  fuel  at  Virginia 
City  and  Gold  Hill,  where  these  shafts  are  located,  is  sixteen  dollars  per 
cord,  in  gold ;  and  the  consumption  of  fuel  is  so  great,  that  this  item  alone 
absorbs  a  large  share  of  the  yield,  and  that  item  of  expenditure  increases  for 
every  foot  of  descent.  These  engines  are  kept  in  motion  day  and  night;  for 
were  they  allowed  to  stop,  the  mine  would  fill  with  water. 


INCREASE    OF  HEAT. 


Another  serious  obstacle  as  depth  increases,  is  the  difficulty  of  keeping  the  mines 
supplied  with  a  sufficiency  of  fresh  air  to  furnish  the  oxygen  required  for  respira- 
tion. The  increase  of  heat,  which  amounts  to  one  degree  of  Fahrenheit  for  every 
sixty  feet  in  depth,  prevents  the  miner  from  performing  the  same  amount  of 
work  as  if  he  were  employed  in  a  healthy  atmosphere,  and  at  a  moderate  tern- 


perature.  The  pecuniary  loss  from  this  source  is  very  large,  considering  that 
3,000  persons  are  employed  at  an  average  pay  of  three  dollars  and  fifty  cents  in 
gold  per  day  of  eight  working  hours.  This  loss  is  estimated  at  twenty-five 
per  cent. 

EVIL    EFFECT    OF   FOUL    AIR. 

But  a  consideration  of  a  still  graver  character,  is  the  evil  effect  a  foul  atmos- 
phere exercises  upon  the  health  of  the  miner.  Amadee  Burat,  an  eminent 
French  writer,  says  upon  this  subject : 

"  The  circulation  of  fresh  air  is  one  of  the  most  important  in  mining.  This 
importance  may  be  readily  understood  when  we  find  that  four-fifths  of  all 
workmen  who  perish  in  mines,  are  victims  of  foul  air." 

Scoffren,  an  English  writer,  makes  use  of  the  following  language : 

"  The  stagnant  air  acts  on  the  organs  of  respiration,  producing  consumption 
and  other  allied  diseases,  which  carry  off  the  miner  in  the  prime  of  life.  As  a 
class,  they  are  robust  and  naturally  less  liable  than  even  seamen  to  such  dis- 
eases ;  but  such  are  the  pernicious  effects  of  the  impure  air  they  breathe,  that 
fifty-two  per  cent,  die  of  consumption,  in  a  country  where  the  per  centage  amongst 
agricultural  and  other  surface  laborers  amounts  only  to  twenty  per  cent,  in  the 
worst  localities."  The  cause  of  humanity  should  provide  a  remedy,  when  an 
effectual  one  is  within  reach! 

Many  other  difficulties  present  themselves  in  deep  mining,  which  increase  in 
a  fearful  ratio  as  depth  increases ;  and  the  profits,  which  have  already  dwindled 
down  to  a  small  amount,  soon,  thereafter,  will  be  absorbed  entirely,  and  then 
be  exceeded  by  the  cost  of  mining. 

The  fate  of  these  mines,  if  no  remedy  is  found,  is  therefore  clearly  fore- 
shadowed. 

NECESSITY    OF   A    TUNNEL. 

The  only  remedy,  positive  and  sure  in  its  operation,  which  presents  itself  is, 
the  construction  of  a  deep  adit  or  tunnel.  It  will  cut  the  mines  at  a  depth  of 
2,000  feet,  draining  off  the  water  to  that  depth  by  its  natural  flow,  securing  the 
best  ventilation,  cooling  the  atmosphere  in  the  mine,  furnishing  facilities  for 
transportation,  and  making  it  possible  to  dispense  with  all  pumping  and  hoisting 
machinery :  for  the  miner  can  enter  the  mines  from  below,  work  upwards,  and 
the  ore  will  fall  by  its  own  gravity,  whilst  a  railroad  in  the  Tunnel  will  trans- 
port the  same  at  small  cost  to  the  adjacent  valley. 

Such  are  some  of  the  considerations  which  present  themselves,  and  which 
show  that  the  proposed  work  is  a  matter  of  vital  importance,  and  one  of  absolute 
necessity  to  the  State  of  Nevada. 


MINING    COMPANIES. 

The  mining  companies,  which  are  mostly  incorporated  in  California,  and  the 
stock  owned  to  a  large  extent  in  San  Francisco,  are  unfortunately  mainly  con- 
trolled by  a  class  of  men  who  speculate  from  day  to  day  upon  the  varying  for- 
tunes of  the  mines,  and  only  care  to  increase  the  momentary  price  of  the  shares. 
Their  interest  in  the  permanent  yield  is  but  small ;  and  this  cause,  together  with 
the  present  financial  condition  of  most  of  the  companies,  give  little  hope  of 
substantial  aid  from  that  source. 


EUROPEAN    MINES. 

Whilst  we  are  enriching  the  whole  nation  by  the  production  of  large  amounts 
of  bullion,  we  are  ourselves  growing  poorer  from  day  to  day.  In  all  European 
mining  countries,  the  respective  Governments,  with  an  eye  to  the  importance  of 
the  production  of  bullion,  and  to  promote  the  general  welfare  of  the  population, 
have  given  substantial  and  liberal  aid  to  similar  undertakings — a  number  of  which, 
on  a  much  larger  scale  than  the  one  here  proposed,  have  been  successfully  car- 
ried out,  and  the  future  of  their  mines  secured.  A  tunnel  was  lately  finished 
in  Hanover  fourteen  miles  in  length ;  one  in  Saxony  is  nearly  completed  eight 
miles  in  length  ;  and  another  in  Austria  of  equal  length. 

Tour  Committee  now  desire  to  call  attention  to  the  important  bearing  the 
increased  production  of  bullion  will  exercise  upon  the  financial  condition  of  the 
country,  and  in  the  payment  of  the  national  debt. 

DEPRECIATION   IN    VALUE    OF    MONEY. 

The  world's  stock  of  coin  in  the  year  1848  was,  in  round  numbers,  eighteen 
hundred  millions  of  dollars  ;  to  this  has  been  added  to  the  present  time,  an 
equal  amount,  of  which  the  United  States  have  furnished,  according  to  Secre- 
tary McCulloch's  late  Report,  eleven  hundred  millions.  Allowing  two  thousand 
millions  as  the  natural  increase  of  taxable  property  by  the  growth  of  the  country, 
we  still  find  that  the  same  has  doubled  in  the  United  States,  within  the  period 
named.  From  seven  thousand  millions  it  has  increased  to  sixteen  thousand 
millions.  This  result  is  due,  not  to  a  direct  depreciation  of  the  precious  metals, 
for  that  is  regulated  by  the  standard  adopted  by  our  Government,  but  by  an 
increase  in  value  of  all  property  and  commodities.  Thus  the  same  article  that 
could  have  been  bought  eighteen  years  ago  for  one  silver  dollar,  now  requires 
two ;  or,  in  other  words,  two  silver  dollars  at  the  present  time  only  have  the 
intrinsic  value  of  what  one  then  had. 


DIFFERENCE    BETWEEN   THE    PRECIOUS     METALS    AND    OTHER    COMMODITIES. 

It  must  be  borne  in  mind  that  there  is  a  vast  difference  between  the  production 
of  gold  and  silver  and  all  other  commodities.  Most  of  the  latter  are  articles  of 
consumption  ;  they  are  useful  for  a  special  purpose,  in  the  application  of  which 
they  are  consumed,  disappear,  and  cease  to  exist.  The  farmer  who  produces 
wheat  to  the  value  of  $1,000,  and  the  miner  who  digs  out  gold  to  that  amount, 
may  derive  an  equal  profit  from  their  different  pursuits  ;  and  hence  one  stands 
on  an  equality  with  the  other,  so  far  as  individual  gain,  or  the  interest  of  a  par- 
ticular locality  is  concerned :  yet  wheat  is  ground  into  flour,  made  into  bread, 
and  consumed,  while  the  gold  dug  out  by  the  miner  finds  its  way  into  the  chan- 
nels of  trade,  is  transferred  from  one  nation  to  another,  as  the  balance  of  trade 
may  require,  and  forms  a  permanent  addition  to  the  stock  of  the  precious  metals 
of  the  world. 

INCREASE    IN    QUANTITY    OF    THE    PRECIOUS    METALS. 

At  the  time  of  the  discovery  of  America,  in  1492,  the  stock  of  the  precious 
metals  in  Europe  was  estimated  at  $170,000,000.  In  the  year  1600,  it  had 
increased  to  $650,000,000 — a  gain  of  nearly  four  fold. 

That  extraordinary  addition  to  the  precious  metals  in  a  little  more  than  one 
hundred  years,  had  a  corresponding  effect.  Gold  and  silver  became  cheaper  in 
the  same  ratio  as  their  quantity  had  increased.  It  required  four  times  the 


amount  to  buy  any  commodity — that  is  to  say,  all  commodities  increased  in 
price  four  fold.  The  same  increase  in  prices  can  be  traced  distinctly  to  the  pres- 
ent day,  as  the  stock  of  the  precious  metals  gradually  increased,  while  making 
due  allowance  for  all  other  causes  which  would  exercise  a  bearing  in  that  direc- 
tion, such  as  the  increase  of  commerce,  the  growth  of  population,  facilities  for 
intercourse  between  different  nations,  etc.,  etc. 


APPRECIATION  IN  VALUE  OF  PROPERTY. 

The  conclusion  we  arrive  at,  by  carefully  examining  into  this  subject,  which  is 
clear  and  positive,  is  that  the  increase  in  quantity  of  the  precious  metals  depreci- 
ates their  value  in  precisely  the  same  proportion  as  it  «/?preciates  the  value  of 
all  kinds  of  property.  Or,  in  other  words,  the  per  centage  added  to  the  stock  of 
the  precious  metals  in  circulation,  adds  the  same  per  centage  to  the  money  value 
of  all  property  in  the  world. 

Francis  Bowen,  the  best  American  authority  on  political  economy,  expresses 
this  view  in  the  following  words : 

"  The  general  principle  is,  that  the  value  of  money  falls  in  precisely  the  same 
ratio  in  which  its  quantity  is  increased.  If  the  whole  money  in  circulation  should 
be  doubled,  prices  would  be  doubled  ;  if  it  was  only  increased  one-fourth,  prices 
would  rise  one-fourth." 

The  same  principle  is  laid  down  by  John  Stuart.  Mill,  well  known  as  the  high- 
est modern  authority  in  England.  He  says  : 

"  It  is  to  be  remarked  that  this  ratio  would  be  precisely  that  in  which  the 
quantity  of  money  had  been  increased.  If  the  whole  money  in  circulation  was 
doubled,  prices  would  be  doubled ;  if  it  was  only  increased  one-fourth,  prices 
would  increase  one-fourth." 


INCREASE  OF  TAXABLE  PROPERTY  IN  THE  WORLD. 

To  illustrate  the  immense  bearing  this  rise  in  prices  exercises  all  over  tl  e 
world,  we  will  assume  the  following  figures  : 

Taking  the  taxable  property  of  the  whole  civilized  world  at  $200,000,000,000, 
the  amount  of  money  in  existence  at  $3,600,000,000,  the  addition  of  $900,000,000 
would  depreciate  the  precious  metals  25  per  cent.,  and,  in  consequence,  it  would 
require  $250,000,000,000  to  purchase  all  the  taxable  property  of  the  world.  The 
addition  of  $900,000,000  in  money,  therefore,  would  have  the  effect  of  pro- 
ducing $50,000,000,000  in  the  increased  value  of  property.  Every  addition  of 
$100,000,000  has  its  corresponding  influence  on  the  increased  value  of  all 
property  ;  it  adds  over  $5,000,000,000  to  the  property  of  the  world.  This  in- 
crease of  value  may  not  be  perceptible  from  year  to  year  ;  the  aggregate  result, 
however,  after  a  number  of  years,  is  inevitable.  Bowen  refers  to  this  as  follows  : 

"  There  may  be  brief  and  violent  fluctuations  in  the  relative  value  of  particu- 
lar commodities,  while  the  great  movement  is  steadily  going  on  which  slowly  en- 
hances the  value  of  all." 


IT    DOES   NOT   AFFECT    INDIVIDUALS. 

This  increase  in  value,  however,  does  not  materially  affect  individuals :  for 
when  the  cost  of  living  increases,  the  rates  of  wages  do,  also  ;  but  it  acts  as  a 
stimulus  to  enterprise,  and  thus  creates  general  prosperity. 

Hume,  long  ago,  remarked  that,  "  in  every  kingdom  into  which  money  begins 
to  flow  in  greater  abundance  than  formerly,  everything  takes  a  new  face,  labor 


9 


and  industry  gain  life,  the  merchant  becomes  more  enterprising,  the  manufac- 
turer more  diligent  and  skillful,  and  even  the  farmer  follows  his  plough  with 
greater  alacrity  and  attention.  But  when  gold  and  silver  are  diminishing,  the 
workman  has  not  the  same  employment  from  the  manufacturer  and  merchant, 
though  he  pays  the  same  price  for  everything  in  the  market ;  the  farmer  cannot 
dispose  of  his  corn  and  cattle,  though  he  must  pay  the  same  rent  to  his  landlord. 
The  poverty,  beggary,  and  sloth  that  must  ensue,  are  easily  foreseen." 

Even  so  cautious  and  conservative  a  writer  as  the  distinguished  English  polit- 
ical economist,  McCulloch,  fully  admits  the  truth  of  this  view,  though  he  adds 
the  just  qualification  that  the  fall  in  money  must  proceed  from  natural  causes. 

William  Jacob,  in  his  valuable  treatise  on  the  precious  metals,  remarks': 

"  The  world  is  very  little  really  richer  or  poorer  from  the  portion  of  metallic 
wealth  that  may  be  distributed  over  its  surface  :  the  whole  mass  of  material  wealth 
is  neither  diminished  nor  increased  by  any  change  in  the  relative  weight  of  gold 
and  silver  to  the  usual  measures  of  other  commodities.  The  only  benefit  to  the 
world  in  general,  from  the  increase  of  those  metals,  is,  that  it  acts  as  a  stimulus 
to  industry  by  that  general  rise  of  money  prices  which  it  exhibits  to  the  view.  It 
matters  little  to  him  who  raises  a  bushel  of  wheat  whether  it  is  exchanged  for  a 
pennyweight  or  an  ounce  of  silver,  provided  it  will  procure  for  him  the  same 
quantity  of  cloth,  shoes,  liquors,  furniture,  or  other  necessaries  which  may  be 

sirable  to  him." 


IT    MATERIALLY   AFFECTS    A    DEBT. 


But  when  a  debt  already  exists,  being  a  fixed  number  of  dollars,  the  decrease 
of  value  of  each  dollar  reduces  the  debt  in  the  same  proportion.  The  immortal 
and  much  lamented  LINCOLN  thoroughly  understood  this  question,  when,  in  his 
annual  message  of  1862,  he  made  use  of  the  following  language  : 

"  The  immense  mineral  resources  of  some  of  those  Territories  ought  to  be  de- 
veloped as  rapidly  as  possible.  Every  step  in  that  direction  would  have  a  ten- 
dency to  improve  the  resources  of  the  government  and  diminish  the  burdens  of 
the  people.  It  is  worthy  of  your  serious  consideration  whether  some  extraordi- 
nary measures  to  promote  that  end  cannot  be  adopted." 

That  wise  and  good  man  had  carefully  studied  the  effect  which  was  then 
strongly  felt  in  Europe,  and  which  is  alluded  to  by  Alison,  the  English  historian, 
as  follows :  • 

BENEFICIAL    INFLUENCE   IN    GREAT   BRITAIN. 

"  It  will  belong  to  a  succeeding  historian  to  narrate  the  wonderful  spring  which 
this  country  (England)  made  during  the  five  years  which  followed  1852,  under 
the  influence  of  the  gold  discoveries  in  America  and  Australia.  The  annual 
supply  of  gold  and  silver  for  the  use  of  the  world  was,  by  these  discoveries,  sud- 
denly increased  from  an  average  often  millions  to  thirty-five  million  pounds  ster- 
ling. Most  of  all  did  Great  Britain  and  Ireland  experience  the  wonderful  effects 
of  this  great  addition  to  the  circulating  medium  of  the  globe.  Prices  rapidly 
rose,  wages  advanced  in  a  similar  proportion,  exports  and  imports  enormously 
increased,  while  crime  and  misery  rapidly  diminished.  Wheat  rose  from  forty- 
five  to  sixty-five  shillings,  but  the  wages  of  labor  of  every  kind  advanced  in  nearly 
as  great  a  proportion  ;  they  were  found  to  be  about  30  per  cent,  higher  than  they 
had  been  five  years  before.  In  Ireland,  the  change  was  still  greater,  and  proba- 
bly unequaled  in  so  short  a  time  in  the  annals  of  history.  The  effect  of  the  im- 
mense addition  to  the  currency  of  the  world,  to  the  industry  of  all  nations,  and  in 
an  especial  manner  of  the  British  Isles,  has  been  prodigious.  It  has  raised  our 

ports  from  £58,000,000  in  1851  to  £97,000,000  in  1854,  £95,000,000  in  1855, 


•    10 

and  £115,000,000  in  1856;  and  augmented  our  imports  from  £157,000,000  in 
the  former  to  £172,000,000  in  the  latter  year." 


PROSPERITY    OF    THE    UNITED    STATES. 

Thus,  the  influence  of  the  increased  metallic  currency  saved  Great  Britain 
from  bankruptcy  ;  and  while  its  mysterious  agency  was  working  these  wonders  in 
Europe,  it  exercised  a  similar  bearing  in  this  country.  Some  years  before  the 
rebellion,  this  country  had  commenced  to  prosper ;  and  when  that  deplorable 
.event  began,  our  resources  were  just  beginning  to  expand  under  the  beneficial 
influence  of  the  increased  metallic  wealth.  Had  it  not  been  for  the  constant  and 
continuous  flow  from  California,  which  increased  the  resources  many  fold,  when 
they  were  most  needed,  the  difficulties  of  providing  the  requisite  means  to  carry 
on  the  war  would  have  been  so  great  that  the  disruption  of  the  Union  might 
have  been  the  result.  It  has  been  the  wonder  and  marvel  of  all  Europe  how 
the  United  States  carried  on  that  gigantic  war  for  four  years,  kept  one  million 
of  men  in  the  field,  contracted  during  that  brief  space  of  time  a  national  debt  of 
nearly  $3,000,000,000,  and  came  out  in  a  more  flourishing  and  prosperous 
condition  than  when  engaged  in  it.  The  explanation  of  this  wonderful  phe- 
nomenon is  simple — the  magic  agency  of  gold  wrought  it. 


FINANCIAL    CRISIS. 

Since  the  war  is  ended,  the  immense  increase  in  prices,  which  is  particularly 
noticeable  in  the  large  cities  of  the  East,  where  real  estate,  rents,  wages,  and 
everything  else  have  assumed  an  apparently  exorbitant  value,  has  been  mainly 
ascribed  to  an  inflated  paper  currency,  and  an  extensive  financial  crisis  has  been 
predicted  as  a  necessary  consequence.  We  have  been  expecting  it  for  three  years 
past,  and  it  has  not  taken  place  yet,  nor  do  we  consider  it  probable  that  it  will  at 
all  occur,  so  long  as  the  increase  of  metallic  wealth  keeps  pace  with  the  expan- 
sion of  trade.  The  credit  system  of  the  United  States  has  been  much  curtailed 
since  the  war,  and  there  has  been  no  time  in  our  history  when  the  business  com- 
munity have  been  less  in  debt.  How  can  a  great  financial  crisis  and  panic  occur 
when  no  overtrading  on  a  credit  basis  has  taken  place,  and  not  sufficient  credi- 
tors exist  to  make  their  alarm  the  cause  of  such  a  commercial  convulsion  ? 


THE    NATIONAL    DEBT. 

The  issuance  of  a  depreciated  paper  currency  during  the  war  has  had  the 
effect,  as  confidence  became  restored,  and  as  its  metallic  value  increased,  of  en- 
riching the  population  at  large  who  held  that  currency,  enabling  them  to  pay  off 
their  private  debts,  while  the  Government,  issuing  at  one  time  as  much  as  three 
paper  dollars,  which  only  had  the  value  of  one  metallic  dollar,  became  proportion- 
ally more  in  debt.  The  result,  therefore,  has  been,  that  the  individual  debts  of 
the  American  people  have,  to  a  large  extent,  been  transferred  to  the  Govern- 
ment, increasing  the  same  to  an  enormous  extent,  and  amounting  to-day  to 
$2,500,000,000.  That  debt  is  a  burden  on  $16,000,000,000  of  taxable  property  ; 
if  we  increase  the  latter,  we  virtually  reduce  the  former. 


INCREASE    OF    TAXABLE    PROPERTY    IN   THE    UNITED    STATES. 

The  amount  of  the  precious  metals  at  present  in  circulation  throughout  the 
world,  amounts  to  $3,600,000,000.    The  proposed  tunnel  to  the  Comstock  Lode 

' 


th 


,  within  thirty  years,  add  $900,000,000  to  the  same,  or  twenty-five  per  cent. 
It  will  consequently  add  twenty-five  per  cent,  to  the  taxable  property  of  the 
United  States,  equal  to  $4,000,000,000,  which,  at  the  rate  of  taxation  of  two 
per  cent.,  will  give  an  annual  increase  to  the  resources  of  this  Government  of 
$40,000,000  for  each  of  the  first  thirty  years,  and  $80,000,000  for  each  year 
ereafter. 


INCREASE     OF    REVENUE. 


The  proposed  work  adds  each  year  $30,000,000  to  the  stock  of  the  precious 
metals,  equal  to  the  one  hundred  and  twentieth  part  of  the  $3,600,000,000  in 
existence.  It  therefore  adds  the  one  hundred  and  twentieth  part  to  the 
$16,000,000,000  of  taxable  property  in  the  United  States,  equal  to  an  annual 
increase  of  $133,333,333.  That  addition,  made  from  year  to  year,  gives  the 
above  stated  result,  as  will  be  seen  by  the  following  table : 


Increase  of  Taxable  Property.  Increase  of  Revenue. 

1st  year $133,333,333  at  two  per  cent.  =  $2,666,666 


2d  year 266,666,666 

3d  year 400,000,000 

6th  year   800,000,000 

12th  year 1,600,000,000 

15th  year 2,000,000,000 

24th  year 3,200,000,000 

30th  year 4,000,000,000 


5,333,333 
8,000,000 
16,000.000 
32,000,000 
40,000,000 
64,000,000 
80,000,000 


PAY3IENT    OF    THE    NATIONAL    DEBT. 

If  this  annual  increase  in  revenue  be  set  apart  for  the  purpose,  it  will  pay  off" 
the  whole  National  debt  in  forty-six  years. 

When  Francis  Bowen  wrote  his  "  Principles  of  Political  Economy,"  we  had 
no  National  debt.  In  referring  to  that  of  Great  Britain,  he  says  : 

"  As  the  depreciation  goes  on,  taxation  may  be  extended  pari  passu  without 
throwing  any  additional  burden  upon  the  community;  and  a  sinking  fund  formed 
out  of  the  surplus  thus  obtained,  would  pay  off  the  National  debt  in  less  than 
one  generation.  Our  National  debt,  it  is  true,  is  but  small,  and  what  little 
there  is,  will  quickly  be  extinguished.  But  the  debts  of  the  individual  States 
are  large,  amounting  in  the  aggregate  to  over  $200,000,000,  a  large  portion  of 
which  is  owned  in  Europe.  It  is,  therefore,  satisfactory  to  remember  that  as 
the  monetary  revolution  will  operate  exclusively  to  the  benefit  of  the  indebted 
party,  our  own  land  will  derive  as  much  benefit  from  it,  in  proportion  to  our 
means,  as  any  other  country  on  earth." 


SIR   ROBERT    PEEL. 

The  effect  of  the  increase  of  bullion  on  taxable  property  and  a  National 
debt,  has  been  long  recognized  by  the  financiers  and  statesmen  of  Great 
Britain,  and  was  enunciated  in  the  following  language,  held  by  Sir  Robert  Peel, 
in  1844 : 

"  There  is  no  contract,  public  or  private,  no  engagement,  National  or  indi- 
vidual, which  is  not  affected  by  it.  The  enterprises  of  commerce,  the  profits 
of  trade,  the  arrangements  made  in  all  domestic  relations  of  society,  the  wages 
of  labor,  pecuniary  transactions  of  the  highest  amount  and  the  lowest,  the  pay- 


12 

ment  of  the  National  debt,  the  provision  for  the  National  expenditure,  the  com- 
mand which  the  coin  of  the  smallest  denomination  has  over  the  necessities  of 
life,  are  all  affected  by  it." 

M.    CHEVALIER. 

M.  Chevalier,  the  well  known  French  writer  on  Political  Economy,  in  his 
treatise  on  "The  Probable  Fall  in  the  Value  of  Gold,"  published  in  1859,  says  : 
"  Owing  to  the  discovery  of  the  new  gold  mines,  a  time  will  arrive  when  a 
change  will  come  over  the  British  Treasury  as  if  some  genii,  an  enemy  of  its 
creditors,  had  spirited  away  their  dividend  warrants,  and  substituted  others  of 
only  half  their  value.  Not  that  the  number  of  pounds  sterling,  due  to  them  as 
principal,  and  of  which  the  interest  is  counted  to  them  every  six  months,  will  be 
diminished — not  that  the  quantity  of  gold  contained  in  the  pound  sterling  will 
be  lessened ;  but  the  British  Treasury  will  henceforth  draw  from  the  tax-payers 
each  pound  sterling,  with  as  little  difficulty  to  them  as  it  previously  took  to  pay 
a  half  sovereign." 

IMPORTANCE    OF    THE    QUESTION. 

Your  Committee,  in  presenting  the  above  views  on  the  importance  of  the 
proposed  Tunnel  as  the  means  of  furnishing  a  large  addition  to  the  stock  of  the 
precious  metals  of  the  world,  has  found  it  necessary  to  enter  somewhat  into 
details  as  to  its  bearing  upon  the  future  of  the  United  States,  and  the  payment 
of  the  National  debt.  This  important  question  is  but  little  understood ;  we 
have  tried  to  throw  as  much  light  upon  it,  by  giving  quotations  from  eminent 
writers  as  the  limited  space  of  a  report  would  allow,  and  hope  the  attention  of 
our  National  Legislators  will  be  drawn  towards  this  subject. 


NATIONAL    AID. 

The  proposed  tunnel  to  the  Comstock  Lode  is,  in  our  opinion,  a  work  of  such 
magnitude  and  vast  national  importance,  that  our  Government,  though  it  has 
always  been  reluctant  to  aid  private  enterprise,  and  was  only  induced  to  aid  the 
Pacific  Railroad  as  " a  war  measure"  will  give  such  substantial  aid  to  this 
enterprise,  as  will  insure  its  being  carried  out  upon  the  ground  that  it  is  emi- 
nently "  a  peace  measure" 

B.  S.  MASON, 

THEODORE  D.  EDWARDS, 

WM.  G.  MONROE, 

Committee  on  Federal  Relations. 


t/oy  /ore/ 

^PAMPHLET  BINDER 

—    Syracuse,  N.   Y. 
' Stockton.  Calif. 


